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Importance of Agri exports

GS Paper 3

Syllabus: Indian economy and related issues

 

Source: The Indian Express

Context: India’s agricultural exports this year are on track to surpass the $50 billion mark achieved in 2021-22. However, rising imports have reduced the agricultural trade surplus.

Reason for this increase: This is mainly due to an increase in shipments of commodities whose exports have been restricted – wheat, rice and sugar.

Agri-trade trends in India:

 

 

Signs of concern:

  • Growth in exports is offset by imports: The agricultural trade surplus fell from $7.86 billion to $7.46 billion between April-September 2021 and April-September this year.
  • Main agri-commodities imported by India:
    • Vegetable oils:
      • After petroleum, electronics, gold and coal, vegetable oils are now the country’s fifth largest import item.
      • In 2021-22, their imports were valued at $19 billion, which is expected to be increased fiscal year.
    • Cotton: India has turned into a net cotton importer primarily due to lower domestic production (in 2021-22, only 307.05 lakh bales (1 bale = 170 kg) are predicted, compared to 353 and 365 lakh bales in the preceding years).
    • Spices: Exports have been driven mostly by chilli, cumin, turmeric, ginger, etc. In pepper and cardamom, the country’s imports and exports are equal.
      • In pepper, Vietnam, Sri Lanka, Indonesia and Brazil have outcompeted India, while Guatemala has gained market share in cardamom.
    • Cashew: In 2021-22, the country’s cashew exports were valued at $453.08 million, compared to imports of $1.26 billion.

 

Why is a surplus in agricultural trade matter?

Because, apart from software services, this is one sector in which India has a comparative advantage (at a lower opportunity cost than its trading partners).

 

Steps taken by the government:

  • Raising the minimum support price of mustard
  • Granting environmental clearance for commercial cultivation of genetically modified (GM) hybrid mustard (DMH-11).

 

Way ahead:

  • The “barnase-barstar” GM technology, which gives higher yields, better disease-resistance or oil quality traits than DMH-11, can be used to develop new mustard hybrids
  • Cotton may require a similar approach to enhance domestic output and yields. For example, the GM Bt technology helped nearly treble India’s cotton production to 398 lakh bales in 2013-14.
  • It demonstrates the necessity of focusing on domestic output and productivity while not restricting the development of technology that enables these.

  

Insta Links:

From Plate to Plough: How sustainable are our agricultural exports?

 

Mains Links:

 Q. Examine how the government’s agriculture policies impact the Indian economy in the short and long term, with a special emphasis on the agricultural sector. (15M)